Energy efficiency to be pushed for new economy

Russia is the leading exporter of energy resources, yet it's also one of the most energy-inefficient economies in the world. Both state and commercial businesses have modernisation projects in the pipeline to improve the country’s competitiveness.

Every year Russia wastes enough energy to power the French economy. But now, the Kremlin plans to put a lid on losses – and make industry a money-making green machine.

To handle the challenge, a 300-billion-dollar energy efficiency program has been approved by the Russian government. The blueprint will help plug the holes in factories and buildings inherited from the Soviet times, according to Timur Ivanov .

“The leaders in terms of inefficiency are industrial giants and housing amenities. For the industrial sector, its two and a half times less efficient than its European peers. The room for improvement is huge.An important thing the program introduces is an energy service contract. Under such a contract, companies are lended funds to improve their energy efficiency and then they pay off the debt by the money they save on being more efficient. “

The biggest oil and gas producer on the planet, Russians enjoy cheap energy prices set by the government. But these low domestic prices are also draining the motivation to conserve energy.

“There is no other remedy to energy efficiency apart from letting consumers pay the real economic price for the energy they are consuming.”

President Medvedev aims to slash wastefulness by 40% within a decade. Initiatives range from phasing out the use of incandescent light bulbs – to providing state support of Russian billionaire Mikhail Prohorov’s project to build an inexpensive hybrid car in southern Russia.

But there is still a long way ahead…

“For the last 20 years we have been reducing energy consumption by roughly 3 to 5%. A lot of other countries moved much faster down this road. Right now energy inefficiency is everywhere – it's public buildings, budget consumers, electricity, gas flaring, etc. It's tremendous.”

Being eco-friendly goes hand-in-hand with energy efficiency. Recently, Russia’s Natural Resources Ministry drafted a bill to make factories recycle the material they currently throw away by selling it to biofuel plants. Right now, Russia uses twice as much energy than China uses to produce the same value of goods – and Russian companies are still struggling to learn how going clean, could bring in the green.